Impact of Financial Constraints on the Performance of SMEs - A Study of Sindh Province

Abstract

INTRODUCTION Sadia Shaikh1 Imam Uddin Khoso2 1Department of Business Administration, Greenwich University Karachi. Email: sadiakhurram@live.com 2IBA, University of Sindh, Jamshoro. SMEs are critical in delivering sustainable and inclusive globalization. In developed as well as developing countries, SMEs are central to the policies for achieving employment targets, value-added exports, higher income levels, and contributing to enhanced innovation. The existence of vibrant SME-sector has been empirically linked with more inclusive growth and environmental sustainability. According to the SMEDA (2018), in Pakistan, 99 percent of the business units are micro, small & medium enterprises and their contribution to the GDP of the country is 40 percent. The contribution of SMEs to employment generation is 78 percent which is above average among the South Asian Countries. The globalization has increased the access of firms to world markets, resulting in rapid economic growth. However, the fast-paced growth has resulted in a highly unequal distribution of wealth and the creation of economically imbalanced societies. SMEs have been widely viewed as the economic apparatuses that spur the growth which results in a more inclusive and equitable distribution of incomes. SMEs' contributions vary widely across the countries, highly dependable upon the business environment they operate in.